If you are an Idahoan who received unemployment benefits from the COVID-19 pandemic, you might be in for a big surprise when filing your taxes this year.
If you didn't already know, those checks are taxed, and depending on how much you received, You could have to pay a hefty amount.
The top question the Idaho tax commission is getting this year is whether stimulus checks and economic impact payments will be taxable?
The answer is no, they are not, but it's a different story for unemployment checks.
"Your unemployment that you got, including if you got a return to work bonus and the additional unemployment you might have got through the federal government, that extended for a period of time, those are taxable both by the federal government and by Idaho," Tax research specialist, Tami Ryals said.
You'll need a 10-99 G form from the Department of Labor. If you received a return-to-work bonus, you'll also need one from the Idaho State Tax Commission.
"They're going to take both of those forms when they get ready to do their taxes, and they're going to list them on their federal tax return. It's line 7 or 8 on the federal tax return, and then we take the federal adjusted gross income here in Idaho, and that's where we start from," Ryals said.
The work is double-checked. To make sure accurate information is showing.
"So we do have reconciled those at the end of tax filing season to make sure what your showing on your tax return is what we show you should be showing on your tax return, and it's going to hold up your refund if it doesn't match," Ryal said.
Make sure to claim the unemployment on your federal and state return. If you plan on fling for an extension, know that it's not extra time to pay, but only to file.
"Be sure to file your taxes on time. Even if you think I don't have the money to pay this, then contact us to set up a payment plan or handle it that way. Don't just ignore us and think that we'll go away," Ryals said.
Make sure to file on time and do not file an extension thinking it will buy you time to pay. Both the IRS and the Idaho State Tax Commission will start processing returns on February 12th, and refunds will start being returned after that date.
